 Hello everyone. Welcome to Options with Doug. Streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern Time. Before I get started, I need to go through the Disclosures. General Disclosure. All Bookmap limited materials, information and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk Disclosure. Training futures, equities and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. The focus of my presentation and the focus of the Options-Doug chat channel and Discord is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading and the first is planning and I use positional analysis. I look at how traders and market makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding expected trading range and volatility for the day as well as a directional bias. And the second step in my process is execution and I look at real-time order flow in Bookmap and real-time market maker hedging flow in Spot Gama Hero to confirm my thesis and for setups. And finally on topic questions and comments are welcome and I will be watching both Discord and the YouTube chat for your questions and comments. So again they're welcome and JEC confirms audio good and Discord. Thank you. And YouTube and YouTube know us as Good Afternoon. Good Afternoon to you. Welcome everyone. Okay let's get started and what I want to cover today is news. We'll go over the economic data and key events for the week that could have an impact on the market and then we'll go through our positional analysis and then finally we'll look at some good some setups and there were some good good setups this morning. Okay so first of all the big event for the week of course is the FOMC meeting today and tomorrow and the announcement tomorrow. And this is showing this is the Fed watch tool available on the CME website and this is showing the current Fed funds rate. The target rate is 450 to 475 basis points and this is showing the what the market is pricing and the probability of maintaining that current rate target rate. In other words not increasing tomorrow is just under 20% and then the probability of a 25 basis point rate hike is just over 80% and that has changed somewhat over the from yesterday. Yesterday that was at about 74% and 26% and then a week ago at about 70% and 30%. So the probability of a 25 basis point rate hike has been increasing in the last few days. Alright so that again that's the big event for the week and also tomorrow morning is VIX expiration and then Friday jobless claims and then I'm sorry Thursday jobless claims and then on Friday durable goods orders at 8 30 a.m. Eastern time and there's some PMI data at 9 45 a.m. Eastern time. Alright let's take a look at our take a look at our positional analysis we'll take a look at charts. So this is the S&P 500 and this is in book map showing the S&P 500 futures. Yes training at a very narrow range today nothing you know I guess in my my thought not a lot to see here training at a very narrow range and this is what spot gamma was looking for today this this narrow range which makes sense with the FOMC announcement coming tomorrow. So before I dig into this chart I'm going to take a look at a larger time frame this is the SPX a 20 day one-hour chart and thinkorswim and this is just showing spot gamma levels the red horizontal lines and price again thinkorswim 20 day one-hour chart and these levels are provided to spot gamma subscribers and in a thanks grip that you have to update manually it takes a couple minutes. So the levels key levels here this is the put wall that's the 3800 level put wall that's a strike with a largest net negative gamma and that can be expected to act as support and then here is the 3950 level there are several levels close to 3950 that was expected to act as support today that's also the volatility trigger at 3955 and the volatility trigger is spot gamma's proprietary gamma flip level and above that level that means that market makers position on the gamma curve is positive and they will be trading against price to hedge their delta exposure and then 4000 is the key gamma strike or the absolute gamma strike and that is the as also noted as resistance today in the spot gamma AM founders note and then finally here's the call wall at 4065 that's a strike with the largest net positive gamma and that can be expected to act as resistance so that's the range of levels and again that's a 20-day chart let's take a look at a shorter time frame again the same same type of chart would just zoom in on today and this is a thinkorswim chart again one day one minute showing the 4000 level above the key gamma strike and then the collection of levels here the cluster of levels at this there's the 3950 support level the 3952 combo L5 level and there's the 3955 volatility trigger resistance above support below and again SPX trading in a very narrow range today all right let's take a look at book map and the same levels are shown on this chart and first of all this is the spot gamma cloud notes spot gamma provides these levels to subscribers for a variety of different platforms and in book map they are provided in the form of cloud notes which are updated automatically right now spot gamma is using a 40-point difference between ES and SPX so this is that ES 4040 I calculated it a 33-point difference today so I'm showing that level down here and this is a little bit closer to the actual level so I'm again I'm showing a 33-point difference so this is at 4033 that 4000 key gamma strike resistance level so again not a lot to see here there were some a lot better setups and in single stocks that we'll take a look at today trading and again S&P in a very narrow range all right let's talk about shifts and levels and there were very few first of all SPX the volatility trigger shifted slightly higher from 3950 to 3955 and also the spy volatility trigger shifted slightly higher from 394 to 395 and then also the spy put wall shifted higher from 380 to 390 and then finally for QQQ want one minor shift in the volatility trigger as well from 302 yesterday to 304 today okay so again just minor shifts and levels for the for the indices and that was pretty much true for single stocks too okay let's take a look now at the gamma levels and this you will see where these levels come from this is the S&P 500 absolute gamma levels this is SPX again showing absolute gamma levels market makers position at these strikes here's the zero line this horizontal line and above that line the black bars are showing call gamma or positive gamma and below the bar zero line the teal bars are showing negative gamma or put gamma so here's the 4000 level the key gamma strike or the absolute gamma strike strike with the largest absolute gamma there's the 3800 put wall the strike with the largest net negative gamma and that can be expected to act as support and then here's the 4065 call wall the strike with the largest net positive gamma and that can be expected to act as resistance and just a reminder that is the call strike of the JP Morgan collar that is the so that is the call strike the JP Morgan collar that expires at the end of the month March 31st all right and so that's SPX let's take a look at spy the same thing the zero line here we're looking at call gamma or positive gamma above with the black bars or and put gamma or negative gamma below and 390 remains the key gamma strike the absolute gamma strike and that's also the put wall so that's the strike with the largest absolute gamma and also the strike with the largest net negative gamma and then the call wall is still at 402 and note here the the dominance of put gamma below the 400 level and some put gamma call gamma between 390 and 400 but the stand what stands out to me is the dominance of the put gamma below 400 all right then we're on this page let's take a look at the combo levels and this is showing SPX and spy gamma combined into one chart and then shown with equivalent SPX numbers again positive gamma above the zero line negative gamma below and here is the remember the volatility trigger is at 3955 and this is pretty close here this 3956 and showing the negative gamma or put gamma below and positive gamma or call gamma above okay there's a question in YouTube what is your configuration for outside liquidity so I'll when we get back to I don't know if there's any any configuration or not I'll take a look at that when we get back to book map when we finish our positional analysis here okay so that is the S&P 500 let's take a look at the NASDAQ now and for the NASDAQ we look at QQQ the NDX is not significant so for QQQ 300 is the key gamma strike the strike with largest absolute gamma 285 is the put wall strike the strike with the largest net negative gamma support level and then 310 is the is the call wall the strike with largest net positive gamma and note the dominance of put gamma below the 300 level and call gamma above all right let's take a look at data now and I always like to focus on the gamma notional this is market makers position on the gamma curve and note it's negative for SPX in the far left column spy in the middle column and QQQ on the far right column so this is indicating that for all these indices and especially the S&P 500 spy SPX and spy market traders are long puts market makers are short puts and they have to sell in the direction of price to hedge their delta exposure so as price decreases their short puts they're gaining delta so they have to sell futures to hedge their exposure and then if price increases and implied volatility drops they can buy back their short futures their delta exposure decreases all right these levels did shift from yesterday all became excuse me they all became less negative so yesterday gamma notional for SPX was minus 518 today it's minus 305 yesterday spy gamma notional was minus 1836 today it's minus 1530 and then yesterday gamma notional for QQQ was minus 66 and today it's minus 50 minus 56 so it's QQQ was pretty much neutral and still in negative gamma territory for the S&P 500 all right let's take a look at the Vanna charts now that will that graphically illustrate this so this is showing market makers delta notional or delta exposure in the vertical axis strike price or price in the horizontal axis and the green curve is showing how market makers delta notional changes with changes in strike price and implied volatility and that's shown again by the green curve for the current expiration and that's the Vanna effect the change in delta with a change in implied volatility and this is showing that excuse me this is showing that again market makers delta notional will increase as price decreases and market makers will have to sell futures to hedge their delta exposure and it works the other way around this price increases their delta notional decreases and they can buy back their short futures so that's SPX here spy note the this is steeper and that's because the right now the gamma notional for spy the gamma notional for spy is five times five times more negative five times greater than SPX and also the black line is showing how market makers delta notional changes as time passes that's the next expiration and that is the charm effect the change in delta as time passes and then finally here's QQQ much more neutral this is indicating that market makers will not have a lot of not have a lot of hedging to do in either either direction based on this at the beginning of the day all right that is the the Vanna charts let's take a look at the key my key gamma strike list and this is a spreadsheet that I keep every day just showing these stocks in my watch list and I track the key gamma strike for today and compare that with a previous day so the previous key gamma strike is shown in the far right column the E column and then the current key gamma strike for today is shown at the D column and I color code these and I color code these based on whether the number increased or decreased so red indicates that the this is shown yesterday all the key gamma strike for all these stocks decreased from the previous day and this set up some good shorts it was a good indication to look for shorts especially and in Microsoft and then today there are there were a couple of stocks with rising key gamma strikes noted with the green here so for example in video key gamma strike yesterday was 250 increased to 260 today and then also for snowflake 130 to 140 so a decrease in the key gamma strike I on the surface I insert interpret that as bearish traders are looking for lower prices they're accepting lower prices and positioning themselves in the options market for that and then just the other way around for for a rising key gamma strike traders are looking for higher prices they're accepting higher prices and again positioning themselves in the options market so like that so finally one thing to note and important for today is this drop in the key gamma strike for AMD and that will come into play today AMD was a great short setup okay so that and then also actually in video was as well so there's you know sometimes this works sometimes it doesn't but we'll take a look at both they were both great short setups in the morning okay that is the positional analysis and really for the S&P 500 my thesis was looking for a narrow range again not much to do just waiting on the FOMC announcement tomorrow at at 2 p.m. all right so let's let's look at some setups now all right let's go we'll take a look at hero first and let's start with AMD and if anybody has any stocks that they want me to take a look at let me know and I've got a few really good setups and then I may have time later on to look at look at some additional stocks so this is AMD and for those of you who may not be familiar this is spot gamma hero hero is H I R O that's the hedging impact of real-time options and this is showing options trades and market maker hedging flow responding to those options trades and a falling blue line purple line here indicates that traders are taking negative delta positions and market makers are selling stock to hedge their delta exposure and you can also separate out the puts and calls and this is showing in the morning that traders were buying puts from the open that's a falling blue line and initially they were buying calls and then they started selling calls and price responded lower okay so that is that's hero let's go take a look at book map now we'll take a look at the setup in and book map there's AMD I'm gonna take a look at cumulative volume delta and also you really don't even need to take a look at that you can just see all the pink dots here so the pink dots are showing these are volume dots pink and a few green this is showing buy minus sell so a pink dot would mean that the market sell orders are greater than the market buy orders and this is a very this is very bearish bearish order flow all these pink dots a lot of sell orders and this is pretty typical of AMD sometimes the order flow is hard to read notice price increases and you know there are a few green dots CVD continues to fall but price is rising and so the key is to look at hero and see what options traders are doing so again this is a very looking at the morning session very bearish here's the first after the break of the trend line if you didn't catch that then the first entry here was the test of VWAP and then multiple breaks below these round numbers and then the the final target and price did not get there was the 93 hedgewall and the liquidity at that level all right and there was a question before in discord Alejandro asked what is the configuration for outside liquidity all right let's let's check that and that is one of the one of the add-ons available with with book map so this is all I have so the liquidity and the difference so that's the only one that's selected right so I hope that helps okay so that is AMD that was the the first setup that I wanted to take a look at let's take a look at meta another good setup here let's go take a look at at hero and here's meta not quite as clear a setup as AMD let's just take a look at puts and calls see if there's any more clarity so overall today traders are buying puts and buying calls and I can tell the calls are shown with the orange number of the orange line I'm looking at this number here this notional value and that's 17 million versus the blue line there traders are buying puts when the blue line is falling uh 18.6 million so put buyers slightly overwhelming the call buyers total line is negative not by much but definitely uh definitely moving down again not quite as not nearly as clear as AMD all right let's go take a look at book map the order flow is definitely bearish here this is cumulative volume delta still going down and this is I saw this a lot today this bearish or falling cumulative volume delta a lot of uh a lot a lot of market sellers a lot of pink dots and if you miss this first drop there is a reversal just after 10 am at the 202 level and VWAP these small green dots are showing a buy sweep up to that level and then the sharp reversal lower first price target at the 200 level and the call wall key gamma strike level and note that um according to spot gamma whenever an instrument is trading above its call wall it's considered overbought and I they talk about that I guess more in terms of uh indices but again anything trading over the call wall uh you know it's a good idea consider that overbought and look for potential short setups just one more one more thing to think about and look at but AMD meta definitely a bearish setup today target first target at the 200 level again the call wall and the key gamma strike and then the primary target or next target down at the high liquidity at the 198 level and notice this liquidity comes in at the open at the RTH open or a few minutes after and this is pretty typical of stocks and price seeks these liquidity levels all right there's there's meta let's go back to hero now and the next is Microsoft take a look at hero so definitely um definitely bearish today let's zoom in on the morning so hero note the following hero line traders are taking negative delta positions and then price responds giving you some good pullback entries and down to the primary target at the 270 key gamma strike which was also the target for the short setup in Microsoft yesterday all right let's go take a look at book map here's Microsoft not quite the range yesterday Microsoft was straight down I can't remember where it started but ended up around 270 that's the 270 key gamma strike and no liquidity at that level so these were the two targets the primary targets the 275 hedgewall high liquidity level and then the 270 key gamma strike high liquidity level again the level these these liquidity this liquidity comes in just moments after the RTH open pullbacks pullback entries at Vwap there's the first one there's the second one and then price continues lower at the 270 hedgewall 272 hedgewall down to the next price target at 270 and again like the other stocks that we've looked at today note the following CVD and all the pink dots here a lot of market sell orders right so JEC uh says Microsoft opened at 277 yesterday and closed at 272 and I know 270 was the um the primary target for short yesterday yeah the key gamma strike for Microsoft did not did not change let's just go take a look at at at equity hub for Microsoft so that is hero we can look at oops I'm not sure why this page refreshes like that I've changed the settings in uh chrome so I thought it wouldn't do that so there's Microsoft we'll take a look at history so this is showing there's no change from yesterday 320 to 321 and the key gamma strike key delta strike remains the same the hedgewall did increase from 262 to 272 call wall remains the same at 300 and put wallet to uh 262 all right so let's go take a look so there's Microsoft another good setup and then Nvidia and just like uh AMD today there's a very strong correlation uh between hedging flow and price action so really it looks like puts were driving traders were buying puts in the morning let's just zoom in on the morning session up until about noon so in the morning traders were buying puts and selling calls but it looks like puts were driving this notional value shown with the blue number here on the right uh right edge the right axis vertical axis minus 79 versus minus 17 so traders buying puts market makers are selling puts and they have to sell stock to hedge their delta exposure let's go take a look at book map and very interesting rebounded Nvidia here but great short set up in the morning uh confirmed by hero uh CVD and note that in the morning Nvidia was also trading above its call wall and key gamma strike so the first short set up was here at this trend break note the absorption at the 263 level trend break price reverses higher goes down below the call wall 260 call wall liquidity at that level uh reverses higher at the 259 level and then reverses lower again at the VWAP and all these entries were uh marked by trend breaks nice pullback entries this one at VWAP and the 261 level and then really the last good short set up here uh both before this free fall down to 255 was at the 260 call wall key gamma strike and just like the other stocks that we looked at whoops falling CVD and a lot of pink dots a lot of market sell orders let's zoom out so it looks like the uh the sellers uh somewhat exhausted themselves here at the 254 255 level and then price reversed higher let's go back and take a look at hero total and there's a pretty sharp V reversal higher at that 254 255 level as traders started taking positive delta positions well let's take a look at the indices now we'll start with QQQ and overall not uh in the morning uh the hedging flow is definitely definitely bearish and really not not a lot to see here compared to the stocks that we just looked at just zoom in so this is definitely for the day traders are taking negative delta positions they're fading this move higher let's let's see if we can get more detail about what they're doing so this is pretty typical uh they're buying puts and buying calls and then when you compare the notional value here this number is minus 524 versus 161 so RJ I knew you were going to ask that and we'll take a look at it but I it's not something that I normally look at again I've um yeah I'm not sure why you're so interested in this I think it uh I I just tend to look at the all trades all expirations and this to me it provides a better signal and saying that let's let's confirm um and that's pretty typical let's take a look at next expiry so pretty much the same thing um so it looks like the all the next expiry is playing a pretty large role in in qqq uh 264 negative 264 versus negative 364 um and again just another another interesting thing to look at but um um not necessarily something that I'm going to uh take take time to look at every day all right so that's qqq let's take a look at the smp 500 this is the combined signal for the smp 500 combining spx spy and xsp options trades and xsp is insignificant compared to spx and spy so essentially this is spx and spy and this is a uh a choppy mess just like just like the uh smp 500 uh traders are let's see what they're doing they're probably buying puts and buying calls yep so the the blue line is showing uh minus 1.65 billion versus 1.44 positive 1.44 billion for the orange line for calls all right jc says uh wish on sp smp 500 we could ignore the pre-market and uh yeah I kind of agree with that it's the number is is so small all right and then for rj will we'll take a look at next expiry here so in this case there may be a closer correlation um maybe a maybe a long setup long divergence there short setup and this is not not providing anything so I think the um you know if you did want to look at the zero dte uh watching this looking for a small long setup so if you do I you know rj if I um did want to focus on zero dte I would only focus on the uh smp 500 let's go back to all trades so that's all explorations in here you can see the same somewhat divergence for a small long here all right so what jc is talking about is this pre-market section right here just a flat line uh up until 9 30 where it starts to move all right so that's the smp 500 and let's take a look at tesla and as usual there's a strong correlation between hedging flow and price action in tesla and today mostly call buyers buying stock and this is um today looks a lot like yesterday good good short setups in microsoft and some other large cap tech stocks and then so those were the best bearish setups especially microsoft I think it had the largest range of of any stock that I that I follow and then uh tesla was the best long setup and this you know exactly the same today so let's go take a look at at book map now for tesla actually let's let's take a look at spy so I you know they're just kind of a choppy mess up and down um a lot of the other stocks that we looked at were uh a lot more consistent so this is pretty much just very uh short range day trading uh up and down all right here's tesla so the only issue for me was the um the falling cvd and again that indicates to me that the strong driver for price action is options trades and I'm going to zoom in on this let's just get rid of this and I'll zoom in so if you could ignore the all the pink dots and just look at price action so watching hero watching price action there's the full first pullback entry to vwap just a few minutes after the open the multiple test of this 190 liquidity level and then finally uh break out above vwap retest of the 191 level and then another pullback entry to um to 193 primary target at the 195 liquidity and rj comments on cvd and I um I agree sometimes it provides a good signal sometimes it does not uh I if hero is going one way and cvd is going another uh I'm typically going to follow hero I think it provides provides a better signal all right so this is uh this is tesla uh again driven by options trades let's go back and take a look at hero so and driven by call buyers primarily 356 versus 92 call buyers are driving uh as opposed to put sellers all right so there's the uh request in in youtube to take a look at amazon right so let's go take a look at amazon and I didn't see much in in amazon today this was not very not very clear to me uh let's go take a look at at book map and I do not have google up in um I did not have google up in in uh book map here we'll take a look at hero but I don't have it so this is uh amazon I did not I just saw this and moved on this morning uh you know I'm primarily looking at the morning session and here there is just not a lot um not a lot going on in amazon and not much uh not much of a confirmation in hero and much much better signals in amd meta microsoft and invidia so I saw this in amazon and hero in amazon and uh I just moved on well let's take a we'll take a look at google in um here in hero and when I do look at it uh we'll take a look at google but I take uh typically look at at goog we'll take a look at both and see so there's a pretty strong correlation between uh hedging flow and price action let's just compare that with goog right so with goog we have a let's just take a look at this number so that is minus 35 for goog uh goog so let's go back to google we'll compare the numbers so about the same just a lot stronger correlation here okay so um kim sim kim see uh looking at alerts he's talking about these alerts here um noting the call wall breach for google at 130 so what he's talking about is this this call wall breach right here this level and notice it acted as resistance and um one thing to note is for single stocks a call wall breach can have uh act in a couple of different ways and typically you expect the call wall to be resistance and that if that call wall breach occurs later in the day that I think that's pretty uh typical um if the call wall breach occurs early in the morning uh that can actually act as as an accelerant uh when those if traders keep buying calls and usually the sharpest movements are in the first couple of hours if traders continue to buy calls those call walls uh the the call wall the the large amount of calls at that level uh go in the money the the delta increases and that's just an accelerant for traders for market makers to have to continue uh to buy stock to hedge their delta exposure so consider the time of day when you see this um when you see this alert so here so far it looks like this alert for for google here this is what i'm talking about um alerted at about 130 eastern time 130 p.m eastern time looks like so far it is acted as resistance and let's see there was um let's just take a look at another wall breach here here's amazon at 143 let's go take a look at amazon so it looks like so far amazon is uh is moving higher so anything you see here always confirm and order flow and here so far order flow looks looks bullish all right so uh looking at comments and youtube jc confirms um what i said about the call wall can act as an accelerant especially early in the morning and sim c you're welcome okay that is uh my time is up that's all i have for today and remember tomorrow i would not look for much in the morning um so will uh my session starts at 130 p.m eastern time and the fomc announcement is at is at uh 2 p.m so we'll prepare for that and then we'll uh we'll watch price action uh at uh at the time of the announcement all right thanks everyone thanks for your questions and comments thank you for watching and i will see you tomorrow